Management and Zara

Amancio Ortega and his company Zara have developed a fast fashion model that has revolutionized the fashion industry. From their origins in Spain, these companies have become a growing international presence that tailors fashion not to preset seasons and the whims of star designers, but to the changing demands of customers. However the growth in Zara sales will slow down eventually, this slowdown will likely be due to the increasing adoption of its business model by

Zara has its own railway track on which the goods move to the distribution centre. Its distribution facility functions with minimal human intervention and optical reading devices sort out and distribute thousands of clothing an hour. (Ray, 2010) Zara business model differentiates it from the competitors. It is positioned on high quality and low

Zara 's combination of cutting-edge fashions and culture lends itself well to a European-style, fashion-conscious consumer. While this type of consumer can be found in New York, this is not representative of the entire US market. Retailers in small towns and urban sprawls rely more on a shopping mall atmosphere. Adapting that strategy would undermine Zara 's image. It is therefore recommended that Zara target only major metropolitan areas which would likely have higher concentrations of fashion-minded individuals.

Information Technology: Zara was able to balance convergence and divergence within the company that provided a great platform for its expansion into other countries. They followed standard procedures in selecting the market that closely resembled the Spanish market, had a minimum level of economic development and relatively easy to enter. The decision of an “oil-stain” approach in entering made it easier to scale operations by opening up a flag-ship store to fully understand the local environment and culture, then after additional stores would be added. This is similar to the approach Amazon.com is taking in expanding its operations abroad by targeting easy to enter countries and limiting the amount of categories before expanding. In addition because many of the markets they entered were similar to Spain they were able to use basic/standard designs to make up 85%-90% of the product mix. Zara’s expansion procedures also left room for customization for each market and store that wasrequired for different cultures and countries. Some of the areas that had to be tailored between countries were the type entry mode (franchised, owned, joint), product mix and offerings that fit their market (decided by the store owners), pricing (some countries are more price sensitive like Germany; however, France was more fashion sensitive) and brand positioning (based on purchasing power and taste). Zara’s open culture amongst headquarters and the

Zara is a leading Spanish fashion company established in the year 1975 in La Coruna by Amancio Ortega , who began his clothing career as an assistant tailor. It forms a major part of retail group known as Inditex, which is a major fast growing industry in the global market. Inditex is a merger of major high street brands all over Europe consisting of Bershka, Bear, Zara, and Pull in more than 68 countries.

At its heart Zara is building on a vertically integrated demand and supply chain, while most other textile chains rely on outsourcing and cheap labor in China. It enables company to short turnaround times and achieves greater flexibility, reducing stock to a minimum and diminishing fashion risk to the greatest possible extent.

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia. Founded by Amancio Ortega and Rosalia Mera in 1975, it is the main brand of the Inditex group and also the world’s largest apparel retailer (Inditex). It is one of the first store’s to showcase low-priced look alike products of high-end clothing brands. Later on, it was viewed as an ‘instant fashion’ company as it revised its logo, manufacturing, and distribution process along with improvements that included information technology and the use of designer groups instead of individuals. Beauty, clarity, functionality and sustainability; over the years it has remained loyal to its core values expressed in these 4 simple words. With its current portfolio of 2,169 stores worldwide, Zara generated revenue of about US$15.9 billion in 2016. Its target market is young, price-sensitive, and highly responsive to the latest trends (Harbott). They hold a strong competitive advantage over other retailers because they don’t define their target market on the basis of age or lifestyle segmentation, providing them a relatively broader market to target.

Zara has created a very creative business model and supply chain technique that is often studied but very rarely copied. Zara has a very centralized headquarters in Arteixo, Spain. This allows Zara to have a good grasp on the business processes. They focus on speed and responsiveness by delivering quick and small batches of clothing to stores at precise times. About half of the manufacturing is either done in Spain or a neighboring country, Europe and if it is not manufactured there then it will be shipped to the distribution center before going to a retailer. This allows Zara to have a competitive edge when it comes to their supply chain. Zara does this by being a vertically integrated retailer. unlike similar retailers Zara controls most of its own supply chain, from designing, manufacturing and distributing to its products. Zara offers

Zara has created a very creative business model and supply chain technique that is often studied but rarely copied. About half of the manufacturing is either done in Spain or a neighboring country. This allows Zara to have a competitive edge on their supply chain. Zara is a completely vertically-integrated retailer. Unlike similar retailers, Zara controls most of its own supply chain, from designing, manufacturing and distributing to its products. Zara also offers considerably more products than similar companies. It produces about 11,000 distinct items annually, compared

Thirdly, it is unique that Zara spends money on marketing, but concentrates on opening new stores instead. For their business model, Zara has a competitive advantage in areas of development, marketing, cost of production and IT infrastructure. Zara gives power to their store managers in deciding what to display and what to sell in the stores based on market research done by the headquarters. Then managers are able to order clothes to meet customer’s demand. For product development, managers need obtain the standardized information from the market or customer feedback by using a handheld device. Then send it back to headquarters for further market research. As a result, the headquarters can have a more effective plan for design and production. In reality, this allows Zara to produce around 11,000 new styles per year, while their competitors can only produce 3,000-4,000. Zara’s speed makes its product development outstanding from the market and it is important for future success. In the area of marketing, Zara only spends 0.3% of their total revenues for marketing expenses, while their competitors spend 3-4% on average. Moreover, Zara focuses on attracting customers by having a good choice of location for visibility marketing, store layout and the styles of product. For example, Zara has new styles of clothes every week and often not restocked, customers will then be attracted to visit the stores every week to

In contrast, Zara has full control over different phases of production of garments. The company is successful due its full control over the

With annual growth of around 20 percent in both sales and number of stores, Zara was finding that strategy increasingly difficult to execute. Part of the Inditex group of fashion distributors, it currently has more than 1,100 stores in 68 countries. With so much volume flowing through the supply chain, the

This competitive advantage for Zara is based on controlling business procedures in supply chain. This company is very different from most retailers who outsource their manufacturing to third party firms in other countries. Zara owns and closely controls their supply chain process which helps them to have more market demand (Lu, 2014).

Zara is a Spanish brand of clothing founded by the visionary Amancio Ortega Gaona and Rosalia Mera in Artexio, Galicia. Zara was founded in the year 1975. It is one of the major selling brands of one of the biggest fashion retailer "INDITEX". Zara is now available in 86 countries with total of 1,763 stores worldwide.

Secondly, Zara is which has a differentiation strategy by designing huge number of different designs. Customers have a good amount of choices right after they are browsing at Zara examine to many other stores, they